Fresh from completing its US$170m acquisition of GPS-based wireless solutions firm Networks In Motion, wireless data and satellite equipment maker TeleCommunication Systems (TCS) has raised US$75m through a debt financing from a club of banks and…
Fresh from completing its US$170m acquisition of GPS-based wireless solutions firm Networks In Motion, wireless data and satellite equipment maker TeleCommunication Systems (TCS) has raised US$75m through a debt financing from a club of banks and financial institutions.
The debt comprises a four-and-a-half-year US$40m term loan and a two-and-a-half-year US$35m revolving credit facility and will be primarily used to refinance existing debt. Silicon Valley Bank (SVB) was the administrative and collateral agent on the transaction.
The term loan, which carries an interest of 0.5% over the US interest rate, will replace the company’s existing US$20m term loan with SVB. TCS has so far borrowed US$30m of the facility, approximately US$18.4m of which has been used to pay off the previous term loan, US$1.04m used to pay commitment fees and the remaining US$10.55m to finance ongoing working capital and for general corporate purposes. The remaining US$10m will be made available to TCS no later than September 30, 2010.
The revolver, which pays a floating per annum interest rate equal to whichever is bigger of 4% per annum or SVB’s most recently announced ‘prime rate’, replaces the company’s existing US$30m line of credit with SVB, none of which had yet been borrowed.
The debt was taken out and secured against TCS and its subsidiaries Longhorn Acquisition, Solvern Innovations, Quasar Acquisition and Networks in Motion.
TCS last tapped the market in November 2009 when it raised US$103.5m via a senior unsecured convertible bond placement.
